The Chinese Communist Party projects U.S. President Donald Trump as the main culprit behind the country’s current slowdown through their media outlets. While this propaganda does turn millions of Chinese against President Trump, a good chunk of the educated population, especially businessmen and professionals, seem to have a surprising affinity toward the American president.
Though many entrepreneurs and policy-makers in China understand that Trump’s tariffs will bring down economic growth of the country, they see America’s action as a “necessary stimulus” that will guide the Chinese society into a competitive, free market economy.
Xi seems to be far more focused on expanding the power of the Communist Party into every aspect of society rather than genuinely caring about private businesses. For instance, one of China’s biggest gaming companies, Tencent, saw its market value dip by almost 40 percent since January this year. The reason? Xi’s government launched a crackdown on the industry in a bid to prevent “gaming addiction in children”. New video game approvals have also been stopped. Both these measures have resulted in lower revenues for Tencent and the entire Chinese gaming industry.
Now, here is the thing — gaming addiction among kids is a hot topic in the West as well. However, the U.S. and EU do not go about cracking down on the gaming industry. Instead, they pass laws in a way that ensures that childhood gaming addiction is dealt without depressing the gaming industry’s revenues. But the Chinese government believes in applying force to resolve all issues, without considering how businesses will be affected. And many entrepreneurs are not happy with how the Communist Party runs the economy.
“Reformers hope Trump may prove to be an external catalyst for change. If the U.S. president can move the Chinese leadership by wielding the blunt instrument of higher tariffs, the thinking goes, it might spur market openings that Party officials would otherwise prefer to avoid. That, in turn, could help private companies to compete more effectively, especially with state-owned enterprises,” according to Rob Cox of Reuters.
Trade War ceasefire
Meanwhile, President Trump’s harsh trade policies against China seems to have worked for the U.S., as both countries agreed to a trade war ceasefire at the recently concluded G20 meeting in Argentina. As Chinese private business owners hoped, the understanding between the two nations involves China becoming a more open economy.
“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services, and agriculture,” according to the White House.
In a win for American businesses, China has agreed to purchase a good amount of agricultural, industrial, and energy products from the U.S. so as to reduce the trade imbalance between the two nations. Beijing has also agreed to approve the Qualcomm-NXP deal, a tie-up that the Party was earlier opposed to.
“The principal agreement has effectively prevented further expansion of economic friction between the two countries and has opened up new space for win-win cooperation,” Wang Yi, Chinese foreign minister, said in a statement (Channel News Asia).
The ceasefire lasts for about 90 days during which China is expected to meet the terms. If Beijing fails to fulfill the conditions, the U.S. will increase tariffs on some of the Chinese goods.